South Korea’s state lender Export-Import Bank of Korea (Korea Eximbank) last month agreed to provide a $150 million financial aid to Singapore-based multinational commodity trading company Trafigura to secure stable supply of base metals to Korean companies as not to repeat the urea crunch crisis.

The financial aid consists of $120 million in loan and $30 million in guarantee, according to industry sources on Monday. The financing arrangement mandates Trafigura to maintain stable resources supply to Korean firms for three years.

The latest aid is part of efforts to prepare for a possible shortage of resources after the urea crisis last year, said a bank official. Trafigura with various resources supply networks globally is capable of guaranteeing stable supply despite export curbs from a certain country by using its stakes in mines in Europe, South America and Australia.

“Global supply network has collapsed due to the Covid-19 situation,” said Bang Moon-kyu, chairman & president of Korea Eximbank. “As supply of nonferrous metal can be disrupted at any time like urea and liquid urea, Korea Eximbank this year aims to go all out to strengthen the supply chains for Korean firms.”

Korea Eximbank drew up a plan to boost loan program for national interest in July last year. Under the plan, it has diversified the financial air target for the resource industry from developers to traders with focus on their previous supply records, not based on long-term contracts.

The state lender now is exploring opportunities for additional financial support to other trading companies and mineral resources developers overseas.

By Yoon Won-sup and Lee Ha-yeon

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